Payment processing fees are the silent killers of business profitability. I discovered this firsthand at Parcl when reviewing our financials. What looked like a standard operational expense was actually a double-digit tax on every dollar we earned.

That moment sparked my fascination with what I now call "the great commerce tax"—the 1.5-3% that every business silently pays to move money. For most companies, it's just accepted as an unavoidable cost of doing business. But what if it wasn't?

Over the past year, I've been studying how emerging payment infrastructure (particularly stablecoins) is fundamentally changing this equation. Today we’re diving into the data behind what I'm seeing.

Welcome to Catalyst—your bi-weekly insights on emerging fintech and Web3 trends, a behind-the-scenes look at some of the top players in the space, and actionable strategies you can implement today. No fluff. No basic takes. Just clear insights on what's actually happening in fintech. 💻

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The Hidden Commerce Tax You're Paying Every Day

Payment processing fees are a massive tax on commerce that impacts every company's bottom line more than most realize.

U.S. businesses paid $160+ billion in credit card processing fees in 2024. That's more than the entire GDP of Hungary.

But what's truly interesting is seeing how these fees directly impact company profitability:

Walmart

With $648B annual revenue, they likely pay around $10B in credit card fees while operating on $15.5B profit. That means payment processing fees consume roughly 65% of their profit.

Chipotle

At $9.8B revenue, they pay approximately $148M in card fees on $1.2B profit—12% of their entire profitability.

Kroger and grocery retailers

With margins below 2%, payment fees could potentially double their profits if eliminated.

For context, the global payments industry processes 3.4 trillion transactions annually, totaling $1.8 quadrillion in value and generating $2.4 trillion in revenue.

The Stablecoin Solution Is Already Here

Stablecoins are quietly transforming from crypto curiosity to genuine payment solution. Consider these metrics from last year:

• Monthly transaction volume hit $1 trillion in November 2024 alone

• 300% year-over-year growth in market cap

• Over 28.5 million unique users sent 600+ million transactions

• Transaction costs that approach zero (versus 1.5-3% for card payments)

Paying with stablecoins vs. traditional payment rails can increase a company's profitability by 10-60% depending on their margin structure.

Just last month, Stripe announced a flat 1.5% fee for stablecoin payments (a 30% discount compared to card payments) after acquiring Bridge.xyz for approximately $1 billion.

As Patrick Collison, Stripe's CEO, put it: stablecoins are becoming "room-temperature superconductors for financial services."

Three Types of Stablecoins Businesses Should Know

Stablecoins aren't a monolith. Three distinct types are emerging, each with different risk profiles:

1. Fiat-Backed (94% of market)

• Direct redemption for fiat currency

• Similar to US bank notes from National Banking Era (1865-1913)

• Dominant players: Circle (USDC), Tether (USDT)

• Regularly audited by major accounting firms (Circle by Deloitte)

2. Asset-Backed

• Product of onchain loans (like Sky Protocol, formerly MakerDAO)

• Parallel to how banks create money through lending

• Backed by highly liquid collateral with strict collateralization rules

• Better for specific use cases requiring programmability

3. Strategy-Backed Synthetics

• Not true stablecoins but dollar-denominated tokens representing collateral + investment strategies

• Higher risk profile; more like "dollar shares in an open-ended hedge fund"

• Potentially exposing users to exchange risk and asset price volatility

• Not recommended for most business applications

1. Turn customers into evangelists. Actively encourage happy customers to share their experiences. Whether that’s through Twitter, LinkedIn, or full case studies, make it easy for them to advocate for you.

2. Leverage industry influencers. Founders and investors with credibility in your space can accelerate trust in your product. Get them using it, talking about it, and sharing their wins.

3. Show, don’t just tell. Instead of saying “our product is great,” demonstrate it with compelling success stories and data-backed results.

4. Make social proof a habit, not a one-time effort. The most successful brands continuously showcase new proof points as they grow.

The Three-Phase Adoption Timeline

For businesses looking to capitalize on this shift, understanding the likely adoption timeline is crucial:

Implementation Readiness Assessment

The Strategic Framework for Implementation

Looking at international payments provides a clear case study:

• Traditional rails: Sending $200 from US to Colombia costs $12.13

• Stablecoin solution: Same transaction costs less than $0.01

For businesses with international suppliers, partners, or customers, the savings compound quickly. One enterprise client reduced cross-border payment costs by 87% through stablecoin implementation.

Based on our work with several fintech clients, here's the framework we've seen succeed:

1. Assessment Phase

   • Map current payment flows and their costs

   • Identify highest-friction/cost transactions

   • Evaluate technical capabilities

   • Determine regulatory requirements

2. Integration Planning

   • Select appropriate stablecoin type for your use case

   • Choose between direct integration or payment processor

   • Develop compliance and risk management framework

   • Create implementation timeline and KPIs

3. Phased Deployment

   • Start with internal/B2B transactions

   • Move to select external partnerships

   • Scale to broader payment acceptance

   • Continuously optimize based on performance data

Stablecoins are a fundamental shift in payment infrastructure with direct impact on your bottom line. Companies that implement stablecoin strategies over the next 24 months will capture significant financial advantages over competitors.

The question isn't if your business should develop a stablecoin strategy, but how quickly you can implement one.